Farmers and councils want inquiry into driving costs and funding

Federated Farmers president Katie Milne - farmers can't just keep paying and paying.

Farmers and councils were often at loggerheads over planning and rates issues, but when it came to seeking alternative funding mechanisms for local government they were on the same song sheet.

So said Federated Farmers president Katie Milne, adding that the Labour/NZ First coalition agreement's inclusion of a pledge to hold a public inquiry to investigate the drivers of local government costs and revenue base could not be acted upon soon enough.

Analysis included in the federation's 2017 Rates Report showed a continuing trend of local government rates rapidly outstripping inflation, she said. In the decade to 2017 the consumers' price index rose 21 per cent, while the local government cost index, which councils said was a fairer reflection of their cost pressures, rose 29 per cent.

Both were dwarfed, however, by the 71 per cent hike in local authority rates and charges. (The same 10 years saw a population increase of 13 per cent, Ms Milne said, and while that demanded more infrastructure and services, it also meant there were more people to share the rates burden.)

"For farmers, rates continue to head moonwards, with static or declining service levels on local roads and little else of value to report," she added.

The briefing to incoming Local Government Minister Nanaia Mahuta had acknowledged the problem, noting that continuing rates increases could challenge the future affordability of council rates for households.

Rates based on land and improvement values could have little or no bearing on the level of services that councils delivered to farmers, and while that could also be true for urban folk, "at least they're getting things like sewerage, water and rubbish collection, which many farms don't."

The federation welcomed the $25 million a year tourism infrastructure fund that the previous government had earmarked for local authorities, many of them smaller, provincial councils, to help to pay for carparks, toilets and wastewater upgrades to cope with seasonal tourist influxes, but increasing demands on local government, including billions of dollars needed to fix water and wastewater infrastructure, new mechanisms, such as GST sharing, had to be looked at.